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The Commodity Futures Trading Commission shouldn't listen to criticism characterizing its stance on cross-border swaps regulation as aggressive, according to U.S. Sen. Carl Levin. "American families and businesses deserve strong protections against the risks posed by derivatives trading, including from cross-border swaps," Levin wrote in a letter to the CFTC. The EU, the U.K. and Japan have urged the CFTC to rely more on foreign regulators, rather than impose its rules on foreign banks.

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The Commodity Futures Trading Commission is looking into options to a cross-border derivatives advisory that the agency adopted last year, according to a CFTC official. For example, the agency is considering deferring to foreign rules for transactions that are arranged or executed in the U.S. but booked elsewhere, if the regulations are comparable to U.S. rules.

Former Sen. Blanche Lincoln, an Arkansas Democrat who played a key role in drafting the Dodd-Frank Act, writes that the Commodity Futures Trading Commission should delay finalizing rules governing cross-border swaps in order to allow international regulators to catch up with the progress made by the agency. CFTC Chairman Gary Gensler has put the U.S. in a leadership position by pushing to develop these rules, but should now wait for an international agreement that would permit the U.S. to respect foreign regulatory agencies' policies, Lincoln writes.

The House of Representatives is scheduled to vote today on a bill designed to exempt foreign banks from certain Commodity Futures Trading Commission swap trading rules, provided that their home countries have similar regulations, and to force the CFTC and Securities and Exchange Commission to coordinate their regulatory approaches on the issue. The bill is not expected to be taken up by the Senate, and is opposed by President Barack Obama. The bill "is intended to send a message that Congress would like them to delay in order to achieve greater harmonization in the approach to cross-border regulation with the SEC," former SEC member Annette Nazareth said.

The Commodity Futures Trading Commission shouldn't listen to criticism characterizing its stance on cross-border swaps regulation as aggressive, says Sen. Carl Levin, D-Mich. "American families and businesses deserve strong protections against the risks posed by derivatives trading, including from cross-border swaps," Levin said. The EU, the U.K. and Japan have urged the CFTC to rely more on foreign regulators, rather than impose its rules on foreign banks.

U.S. lawmakers say the Commodity Futures Trading Commission should decide soon how its rules will apply overseas. "We are very concerned that a lack of coordination between both foreign and domestic regulators could soon lead to a disruption of the derivatives markets," 14 House members wrote in a letter to the agency. The undecided cross-border rules are in addition to as-yet-unwritten regulations for swaps-trading platforms and safety buffers for uncleared swaps.